ATN Week in Review: Xponential Offloads Yet Another Brand
This week, we break down Next Health’s acquisition of Lindora from Xponential Fitness, along with an alarming legal trend for gym operators
Next Health has acquired medical weight-loss and wellness clinic Lindora from Xponential Fitness, the sides announced Friday.
The move marks the sixth brand Xponential has offloaded in less than two years, following divestitures from Stride Fitness, Row House, CycleBar and Rumble Boxing, and a quiet winding down of AKT.
New Xponential CEO Mike Nuzzo said the move allows the franchisor to focus on its “core fitness modalities” such as Club Pilates, Pure Barre and StretchLab. While that may be true, it’s hard to get too excited about the move from an Xponential perspective — the Irvine, California-based company had 11 fitness and wellness brands in its portfolio less than two years ago. It now counts just five.
Investors don’t seem immediately pleased, either. Xpo’s already bruised stock fell over 2 percentage points as of Friday afternoon in response to the acquisition news. It’s fair to wonder whether more Xponential brands could be on the chopping block in the coming months.
Next Health, on the other hand, is in full growth mode amid the longevity boom. Founded by Dr. Darshan Shah, the fast-growing franchisor of health-optimization clinics has told ATN it’s looking to open up 150 locations U.S. by 2027.
US Courts Are Cracking Down on Gym Cancellations
The former CEO of the now-defunct Boston Sports Clubs (BSC) was ordered to pay $3.85 million by a Massachusetts court over pandemic-era billing violations.
The court ruled that Patrick Walsh, the former CEO of Town Sports International LLC, violated consumer protection laws and the Health Club Act by charging members while BSC gyms were closed during the pandemic.
The ruling may seem like a one-off — the pandemic is long over, thankfully — but it speaks to a more troubling trend for operators: U.S. courts and regulatory bodies are getting serious about penalizing gyms for what they view as unfair membership cancellation practices.
We’re effectively living in the click-to-cancel era, even if the controversial rule isn’t technically a law. Last month, the FTC sued the parent company of LA Fitness over allegedly “impossible to cancel” memberships, while Equinox Group was forced to pay $600,000 to the state of New York for its own cancellation policies.
More news & notes:
- Strava is valued at $2.2 billion, and it could be going public soon
- Xplor, Clubessential Holdings to merge, creating software giant
- Solidcore enters celebrity marketing era, tapping former “SNL” star
- Burn Boot Camp, meanwhile, takes a different advertising approach
- Precor’s new treadmill morphs into a sled-style workout tool